Lower rates appear to be working their market magic, if slowly
Robert McLister: You’ll find lower rates if you're shopping for a short-term mortgage, but don't pop the champagne just yet
You’ll find lower rates this week if you’re shopping for a short-term mortgage, but don’t pop the champagne just yet. The leading nationally-advertised uninsured rates dipped only five to nine basis points for one, two and three-year fixed mortgages.
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Those 12- and 24-month loans are still too pricey to take a flyer on, but leading three-year rates at 4.64 per cent (uninsured) or less compare reasonably well in rate simulations, based on the bond market’s forward rate outlook.
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With markets betting on a full point of rate cuts next year, the projected borrowing cost leader over the next five years is still the variable mortgage. Uninsured floating rates hover in low five per cent territory, insured at 4.70 per cent and up. Plus, they all come with a free rate-lock feature — think of it as your financial panic room if inflation gets frisky again.
All told, average fixed mortgage rates are down about 150 bps from one year ago. That’s helping more borrowers qualify for a mortgage and putting a floor under home prices, save for the GTA condo market, where prices are defying gravity — in the wrong direction.
According to preliminary estimates from real estate website Wahi.com, median GTA home prices rose roughly one per cent in October, year-over-year and month-over-month. The company projects that sales were up about 20 per cent over last October. So, lower rates are working their magic, but the magician is taking her time.
Robert McLister is a mortgage strategist, interest rate analyst and editor of MortgageLogic.news. You can follow him on X at @RobMcLister.
Mortgage rates
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